Wells Fargo Bank v. Commonwealth

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This case arose from a consolidated appeal. In the underlying cases, the respective property owners failed to satisfy their debt obligations to professional lending institutions, which precipitated the foreclosure proceedings. In both cases, the professional lenders asserted that their respective mortgages were superior to the general tax liens filed pursuant to Ky. Rev. Stat. 134.420(2). The circuit court entered a judgment granting the professional lenders' liens priority over the other liens. The court of appeals determined that the circuit court had erred in reordering the priorities and reversed the judgment. The Supreme Court affirmed the court of appeals, holding (1) the prior-recorded section 134.420(2) tax liens enjoyed priority pursuant to the long established first-to-file doctrine; and (2) the doctrine of equitable subrogation does not act to relieve a professional lender of a negligent title examination.